A will and a trust are both estate planning tools used to transfer assets to beneficiaries upon the owner's death, but there are several key differences between the two.
A will is a legal document that outlines how an individual's assets should be distributed upon their death. The will appoints an executor who is responsible for carrying out the wishes of the deceased. A will can also be used to name a guardian for minor children and specify funeral arrangements. A will only takes effect upon the owner's death.
A trust, on the other hand, is a legal entity that holds assets for the benefit of named beneficiaries. A trust can be established during the owner's lifetime, and assets can be transferred into the trust while the owner is still alive. A trustee manages the trust and distributes the assets to the beneficiaries in accordance with the terms of the trust. A trust can also provide for the management of assets if the owner becomes incapacitated.
So, which one should you choose? It depends on your specific circumstances and goals. A will is typically appropriate for individuals with uncomplicated estates who want to leave their assets to a few beneficiaries or who cannot afford the cost of creating a trust. A trust can be more appropriate for individuals with large or complex estates, who want to avoid probate or who want to provide for the management of their assets if they become incapacitated.
It is important to note that there may be limitations and exceptions to the advice given based on the specific laws and regulations in your jurisdiction. It is always advisable to seek the advice of a licensed attorney before making any estate planning decisions.
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